Manchester's trendy cinema, the Cornerhouse, is showing the movie Melancholia
at the moment, but the mood in the city after George Osborne's speech here
on Monday was anything but that.

He was able to provide some resolve, at least, to the party faithful that Plan A stands for Action not Atrophy.

Under the impressively restored arches of the great Victorian Central Station, itself the product of a previous period of post-Labour economic rebuilding during the 1980s, the many entrepreneurs and private business owners who heard the Chancellor were reasonably impressed.

The reforms of employment tribunal law were particularly welcomed by the business element who feel that the Coalition has never fully been on their side. This helps change that perception and may, just may, make a few more willing to open the company chequebook and splash some cash on investment and job creation.

The idea of Government intervening more directly in the supply of credit to small companies was met with a rather more muted response. But that's hardly surprising given how such credit easing will actually work, and how soon, are far from clear. That said, the idea of the Treasury taking a monetary plunger to the economic blockages and supplying money direct to small businesses itself could be a radical step.

However, I fear the Chancellor's idea may run into a familiar problem: it's not a shortage of money that's holding back the UK economy, it's a shortage of demand which itself is being hampered by a shortage of confidence.

UK companies have more than £680bn sitting in their bank accounts acting as a buffer against the future, which too many companies view with trepidation rather than optimism.

And it's not hard to see why. On the day that the Chancellor was trying to persuade us that it's not all a complete disaster, markets were once again experiencing turmoil as the Greek debt crisis and wider eurozone worries continued to dictate events. Typically for these times, the good news on UK manufacturing, which showed an improvement in September, and the decision of Standard & Poor's to confirm our triple-A credit rating, was countered by S&P's own view that British hopes of a growth-led recovery and deficit reduction plan were likely to be "optimistic".

While our domestic economy remains weak, hopes for a trade-led recovery were dampened on monday, too, by figures which showed future export orders were weakening. No wonder then that companies are sitting on their hands, and their cash, and not committing to investment or job creation, changes to tribunals notwithstanding.

It's against this background that Osborne also used his speech on Monday to send the strongest possible signal to the Bank of England's Monetary Policy Committee to turn the monetary taps on once again and hose the economy with more quantitative easing. He would, he said, give the Bank approval if the MPC asked for it. Given he announced his own credit easing initiative to support credit directly to small companies, it seems obvious the Chancellor wants the MPC to adopt as loose a policy as possible right now for the wider economy, too.

It's clear that the eurozone crisis is worrying him and his Treasury colleagues deeply and the continuing ineptitude and inability shown by Continental leaders to grasp the situation means we have no choice but to adopt emergency measures such as quantitative easing once again, just as we did in the darkest days of 2008.

The Chancellor was right to identify Europe getting to grips with its debt crisis as probably the single biggest issue facing the UK economy in this next quarter. But that could mean success or failure.

Monday was all about sticking to Plan A and preserving the low interest rates which the strategy gives to the UK economy, an economy which has a much bigger deficit than Greece or Spain, but which has a cost of borrowing just a fraction of those countries. Without such low commercial rates of interest we certainly couldn't even be contemplating a realistic path to growth. In defending his position, Osborne evoked James Callaghan's 1976 Labour conference speech in which he told the rampant Keynesianists that we could not spend our way out of recession. That's true if it's government spending. On Monday, Osborne told us we could not borrow our way out of debt. That's true also if it's government borrowing we're talking about.

But responsible private sector spending and credit formation can get us out of our current problems. However, the conditions for that remain elusive. We still need a "game changer" on growth. That could be a wave of infrastructure investment-led and facilitated by government but funded and run by the private sector. But none of that was mentioned on Monday.

Just as the decade which saw the re-birth of Manchester's Central Station was characterised by new economic policies, so this decade needs a contemporary equivalent. On Monday we heard something else. Resolute, yes. Radical, no.